We maintain our guidance for 2015 for a net profit of above DKK 16 billion.
We expect total income to be in line with the level in 2014. Income will benefit from the high net trading income, particularly in the first quarter, and lower funding costs. On the other hand, negative central bank interest rates are putting pressure on net interest income, and developments in the bond markets pose risks for trading and insurance income. In 2014, income benefited from the sale of our shares in Nets and the booking of part of the shadow account balance at Danica Pension.
Expenses are expected to be below DKK 22 billion.
Impairment charges in our core activities are expected to decline to a level significantly lower than in 2014. The decline is driven by our continued efforts to improve credit quality and an improvement in customers’ financial situation caused by the very low interest rates, rising collateral values and a general improvement in the economy.
For our Non-core business, we expect profit before tax at around DKK 0 million.
Given its dependence on economic conditions, including developments in central bank monetary policies, this guidance is generally subject to uncertainty. Trading and insurance business income are particularly uncertain and trading and insurance results are to a large extent dependent on developments in the financial markets and the possibility for Danica Pension to book the risk allowance and part of the balance on the shadow account to income.